I'll give you two perspectives. First, I'll give you a bit of a global perspective. Canada has always had higher excise rates than our competitors in the United States, and if you go back prior to the introduction of the escalator tax, Canada's excise rates were about 60% higher than those in the United States. Assuming we'll have a 3% increase next April 1st—and that number will be set on September 30—that difference will go up to 85%. What this means is that no one will invest in a Canadian spirits business, no one. Why would you invest when that's what you have to look forward to? The United States is our biggest market and our biggest competitor, and they're fierce competitors. Our ability to compete is being eroded dramatically. That's one perspective.
The second perspective I would give you comes from a meeting that CJ and I had with the two fellows who run a small distillery in Vaughan, just north of Toronto. Still Waters makes very good whiskey, Stalk & Barrel. We shipped a supply of Canadian whiskey to Kiev to help the Canadian embassy celebrate the successful signing of a Canada-Ukraine free trade deal. We happened to be at a meeting with them late last fall. They produce a product called Stalk & Barrel, and they're just at the point where they need to go out and raise more capital to grow their business and be able to sustain themselves. They're a small business. They hired a fellow to help them go out and beat the drums for financing, and one of the early things they did was take a hard look at their business and build a five-year business plan with pro forma profitability. Just based on the 1.5% annual increase, which was estimated when the escalator tax was brought in, that sucked up all the profit in that small business over those five years. One of them looked at me and said, "How are we expected to raise investment dollars for our business when all of the money that we hoped to be able to return to the investors is now going to go to the federal government on excise?"
I offer those two different perspectives about those kinds of impacts. Smaller companies have less capacity to absorb those kinds of things. Of course, then you have the whole issue, particularly with some of the smaller companies, where they're saying, "I thought Parliament's supposed to make decisions on taxes." Those are the two perspectives I would offer.